Hashoo Group to add 28 properties by 2027

COO says rupee devaluation has squeezed margins; new investment required

LAHORE:

Pakistan’s largest hospitality group, Hashoo Group, has unveiled an ambitious plan to expand its portfolio by adding twenty-eight properties by 2027. With a substantial investment in this crucial yet neglected sector, the group aims to fortify Pakistan’s economy.

Presently, the group operates 34 properties across the country and has secured a significant market share in the hospitality sector. The upcoming properties will be strategically developed in second-tier cities of Sindh and Punjab, positioned along the China-Pakistan Economic Corridor (CPEC) route. Additionally, Hashoo Group will extend its presence to first-tier cities and the enchanting northern areas of Pakistan, focusing on a service provider approach through management and franchise models. This expansion aims to tap into the thriving tourism industry and cater to the growing demand.

In an interview with The Express Tribune, Haseeb Gardezi, Chief Operating Officer of Hashoo Group’s hospitality and education division, emphasised the group’s commitment to investing in the hospitality sector. “Our core business is hospitality, which is why we continue to invest in this sector. Stagnation would jeopardise our volume-driven business,” said Gardezi. Reflecting on the group’s experience with the Malam Jabba resort, he explained that the group has decided to exclusively grow through a management and franchise model. This strategy allows investors to develop quality resorts and hotels, thereby enhancing the local hospitality sector. Particularly in the northern areas, attractive resorts have the potential to entice both local and international tourists, contributing to the overall growth of the hospitality ecosystem and creating employment and vendor opportunities for the local population, he explained.

The group has already signed agreements for twenty-eight properties to be established by 2027, with additional negotiations currently in progress. Gardezi emphasised the significance of attracting investments to this crucial sector of the economy, regardless of the investor’s background.

Pakistan’s hospitality sector is currently grappling with the challenges posed by inflationary times. The ongoing economic crisis has affected people’s disposable income, resulting in reduced travel. While the sector faced a severe setback during the Covid-19 pandemic, local tourism experienced a surge after the government eased certain restrictions, as international travel became challenging.

According to Gardezi, corporate clients have dwindled since the onset of the pandemic. However, the tourism sector has witnessed a remarkable boom, attracting investments in the northern areas. This has opened up opportunities for small-scale establishments to flourish. While city hotels have faced difficulties, hotels in the northern regions have thrived.

Gardezi expressed concerns about the sector’s vulnerability to climate-related disasters, highlighting the impact of devastating floods last year. He also highlighted the economic crisis faced by the hospitality sector. “God forbid, if we face another climate disaster this year, the challenges for the sector would intensify,” he warned. Furthermore, the group has experienced a significant loss of trained staff over the past three years, as many have sought employment opportunities in Gulf countries to support events like the Dubai Expo and the FIFA World Cup.

“Our footfall is still 30% down, our yield is low, the rupee devaluation has squeezed our margins. Once we make $120 per room for Rs12000 bookings but this ratio is now under a $100, even we have increased our fares to around Rs30,000,” he said.

Despite these formidable challenges and navigating the hurdles presented by the political and economic crises, Hashoo Group remains determined to leverage its expertise in the sector. With 45 years of experience, Gardezi acknowledged that rapid expansion can only be achieved through partnerships, citing the global trend of Hilton operating thousands of properties without owning them. This model aligns with Hashoo Group’s objectives, investor interests, and the overall economic landscape, as survival increasingly depends on adaptability and collaboration.

“The whole world is undergoing a similar trend. Hilton operates 8,000 properties without owning them because it owns the brand. This model is suitable for us, investors, and is conducive to overall economic activities, as survival now depends on being the fittest,” he said.

Published in The Express Tribune, July 2^nd, 2023.

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